By Ned Smith
June 11, 2009

Netbooks, the mighty-mites of mobile computing, are becoming the sales colossus of the computer industry. Though margins are thin for manufacturers (hardware and software alike), these smaller, less-expensive siblings of the ubiquitous notebooks carried by millions of road warriors are the one ray of hope in this slough of slumping technology spending. And they’re increasingly becoming the portable computer of choice for peripatetic professionals.

Once dismissed as cute novelty devices, netbooks have grown up fast. “It appears that netbooks have already made the leap from consumer toy to business professional,” says Gloria Barczak, the chair of the marketing department at Northeastern University’s College of Business Administration. “According to some sources, netbook sales in the first three months of 2009 (5.5. million) were greater than last year’s hot new product, the iPhone. Expectations are that the netbook market will grow by 80 percent in 2009 with Gartner predicting that by 2012 annual netbook sales will be over 50 million.”    

Economics and the advent of cloud computing have made this evolution possible. With the recession, Barczak explains, “Customers, both consumers and business, are looking for an inexpensive device that performs the primary functions they need — Internet browsing, e-mail, typing documents and sharing some digital media. In addition to their functionality, netbooks are low price, very portable due to low weight and typically have longer battery lives than some laptops due to lower power requirements. So overall they are convenient, affordable and functional. They appeal to a wide variety of users — students, senior citizens, parents and even business people who may be tired and hurting from trying to type e-mails on their Blackberries or iPhones.”

Netbooks, which trace their DNA back to Nicholas Negroponte’s One Laptop Per Child project to create inexpensive laptops, have come into their own and gained a growing cohort of enthusiasts because of the blossoming of cloud computing. It is the enabling technology that has helped netbooks reach a tipping point to make the leap from toy to tool. “As more applications move to the cloud and all you need is a connection and a browser to get work done, netbooks become hugely valuable and cost effective for almost any business,” says Jason Throckmorton, a co-founder of bi-coaLaunchsquadstal tech PR company Launchsquad. “Netbooks running Linux and free application suites like OpenOffice could be a real game changer when it comes to economics and productivity.”

In a survey conducted by market research and consulting company Techaisle,, nearly a third of small and midsize businesses said they were looking at netbook purchases as they consider upgrading their core desktops and notebooks.

The confluence of cloud computing and netbooks is the perfect digital storm that drives the business model for Cloud Sherpas, a pure-play cloud computing integrator headquartered in Atlanta. “Cloud computing is our bread and butter,” says Michael Cohn, CEO. “The specific technology we do is Google Apps. Our consultants are using netbooks as their primary work stations. We have to eat our own dog food, so to speak, so we live and breathe on the cloud. We are a truly server-less environment.”

For Cloud Sherpas, the cloud computing/netbook combo is not a hard sell. “Our customers who are also embracing Google Apps in general are asking us about netbooks because they see us walk in with these little netbooks that practically fit in your pocket,” says Cohn. “And we’re able to administer their entire system from them, and we’re able to do e-mail, create documents and spreadsheets and collaborate in real time.”

Netbooks and the cloud aren’t for everyone, Cohn admits. “A netbook is not the right tool if you’ve got to run tons of software on your machine. That’s not what it’s designed for. If you have to run Office on a desktop, that’s going to suck up all your resources. But if you’re using tools like Google Apps, there are a lot of advantages with a netbook.”

It’s all a matter of tradeoffs. “We’re either going to spend three times as much on a laptop and have to lug it around, or we can spend $300 on a netbook and not even feel it in a backpack. If an organization can operationalize its IT to the point where they’re finally embracing cloud computing, using netbooks in a no-brainer.”

Cohn predicts that netbook use will be adopted function by function, rather than company wide. “There are certain functions where netbooks make much more sense,” he says. “Netbook for a sales guy, a consultant or a road warrior is a no-brainer. But I don’t see graphic designers, for example, jumping on the netbook bandwagon quite yet because they require all this heavy software like the Adobe suite to be installed.”

The allure of netbooks has even fanned the flames of technolust in the august provinces of white shoe law firms. Browning Marean, a partner in the San Diego office of DLA Piper one of the world’s largest law firms, has bailed on laptops in favor of his Aspire netbook sidekick. “I’m on the road just about every week,” he says, “and I do a lot of presentations. Using the Aspire as a substitute works perfectly well. It projects just as well as a full-fledged laptop and I can do 95 percent of the things I need to to do. When you’re on an airplane and that pesky person in front of you decides to recline, you still have some room to work with your computer.”

Because of their low price points (generally $300 to $400), Marean says, “Netbooks are really becoming consumables.”
Though the first wave of netbooks was driven by the Linux operating system and Taiwan-based hardware manufacturers, their increasing popularity has made them a force — and market — that must be reckoned with. Hardware manufacturers and software developers sitting this trend out do so at their own peril. Though late to the game, Microsoft retaliated by offering netbook makers a bargain-basement version of its old Windows XP operating system. Redmond promises that its next OS, Windows 7, will run on netbooks when it hits the market this October.

It had better. Acer and Asus, two Taiwan netbook titans, said June 2 that they will launch netbooks that run on Android, the free operating system Google originally created for cellphones. Will Apple be next?

Stay tuned. It’s getting interesting.

(Editor’s note: This was written with Google Docs on an ASUS 1000HE netbook.)

Ned Smith is a New York-based writer who reports on business and technology. He can be contacted at nedsmith@gmail.com.